The insurance market will grow moderately – Newspaper Kommersant No. 69 (7514) dated 04/20/2023

Despite extremely positive forecasts for the development of the insurance market at the end of 2022, experts now expect growth to slow down to 7-9% in 2023. The most dynamic segments will be accident and illness insurance, life insurance and MTPL. However, the Casco and VHI segment will hold back the overall growth rates. Experts warn that the decline in real incomes of the population will increase competition among insurers in all segments.

According to the results of 2023, the insurance market may grow by 7-9% – up to 1.96 trillion rubles, follows from the Expert RA review (Kommersant got acquainted with it). According to the agency’s analysts, the market drivers will be accident and illness insurance (growth by 13-14%), life insurance (10-15%) and OSAGO (11-13%). In their opinion, the segments will be supported by a decrease in the key rate in the second half of 2022, which will contribute to the return of investment interest of customers in endowment and individual life insurance products, as well as the restoration of those segments of life insurance and accident and illness insurance that are associated with lending . But this effect will only have an impact in the first half of 2023. OSAGO will be supported by the expansion of the tariff corridor, which took place in September 2022.

Earlier, experts were more optimistic and predicted the growth of the insurance market in 2023 by 12%, to more than 2 trillion rubles. (see “Kommersant” dated December 21, 2022). Insurers also agree that the insurance market will grow more slowly than expected. According to Yevgeny Sharapov, director of ratings for NKR insurance companies, in 2023 the insurance market as a whole will grow by 3-5%. The bancassurance segment, whose growth will turn out to be lower than previously expected, will be decisive for the final indicators. In the casualty segment, there is likely to be a significant reduction in premiums due to a reduction in fee income built into the insurance rate, he explains.

Nevertheless, Evgeny Popkov, head of the MAKS product management and marketing department, points out that, as in 2022, personal types of insurance will remain growth drivers – voluntary life insurance (growth by 10%) and accident and illness insurance (10–12 %).

Significant positive dynamics can be shown by credit types of insurance due to the low base of 2022, adds Tatyana Nikitina, Senior Director of NRA Financial Companies Ratings.

Other segments will noticeably lag behind. OSAGO, albeit with a slight slowdown, will maintain the momentum gained in 2022 in terms of the growth of insurance premiums, approximately at the level of 6-8%, Mr. Popkov believes. In addition, according to his assessment, the interest of citizens in property insurance will ensure a moderate growth of 6-7%.

In the corporate insurance segment, the positive dynamics will be largely due to general economic inflation – Evgeny Popkov predicts an increase in premiums within 5-6%. However, according to Yevgeny Sharapov, director for ratings of insurance companies of the NKR agency, property insurance for legal entities can grow by 15%. Drivers of the growth of insurance premiums in real terms will be the desire of clients to preserve and save their property, the adaptation of product lines of insurance companies to the implementation of the most popular insurance options, says Evgenia Vasilyeva, director of the strategic analysis center of Ingosstrakh.

At the same time, the Casco segment will be an outsider, which will grow by 2–3%, Expert RA estimates.

Such dynamics of premiums will be driven by a decrease in demand for more expensive insurance and an increase in sales of more affordable policies with a truncated set of risks and deductibles, as well as only a partial recovery in new car sales. In Casco, with a high degree of probability, a negative trend is being formed to reduce fees to 15%, Mr. Popkov is pessimistic about it. The Casco market will fall primarily due to a decrease in sales of new cars, since Chinese brands have not yet had time to fully fill the niche of departed European brands, Yulia Shabanova, head of the agency and office sales block at IC Rosgosstrakh, explains.

The decline in real incomes of the population, the lack of sources of growth in insurance budgets will be factors in increasing competition in the market, including from member companies of large financial groups and digital intermediaries, Ms. Nikitina concluded.

Julia Poslavskaya